Consideration and Intention Flashcards
What is consideration
the value flowing between the parties
Ex: Money, property, services, right to do or not to do something
What is a Gratuitous Promise
Consideration only flows one direction, one party receives benefit. Law does not stop them or enforce them
Ex: Friend promising to pick you up from the airport
Does consideration need to be equal
No- if an individual subjectively values an object more than its market value, that is not for the court to decide
When will the court look at consideration
Allegations of fraud, duress, or undue influence on an individual
Stilk v Myrick (1809) – ( Canadian position)
Captain of a ship offered the wages of two deckhands to the rest of the crew if they did not also leave. Since the deckhands were already obligated to do their jobs for original pay it was not considered a valid contract.
Williams v Roffey Bros, [1990] (English Position)
A entered into contract with B (General Contractor) to renovate apartments. B hired C (Subcontractor) to completed carpentry work. C experienced financial difficulties and price of contract to do carpentry work was too low (risk of default and C becoming bankrupt);B promised extra money to complete the work.
What was the result of Williams v Roffey Bros
If the promise to pay more for the performance of the same obligation results in a new benefit or obviates a disbenefit to the party, there is good consideration and a valid contract
What was the result of Foakes V Beer
An agreement to accept a smaller sum in satisfaction of a debt of a larger sum is not good consideration
What is the result of Foakes v Beer in regards to the Kings bench in SK
Part performance of an obligation can extinguish the obligation even without new consideration if:
(a) the creditor expressly accepts it as full satisfaction, or
(b) it is rendered under an agreement for satisfaction of the obligation.
What is Promissory Estoppel in Equity
Occurs when a gratuitous promise induces the promisee to change their actions based on reliance on that promise.
If the promisor later reneges on the promise, the court may enforce the promise even though there was no formal contract.
What was the result from Hughes v Metropolitan Railway Company (1877)
If a promise is implied and one party relies on that promise then it is inequitable to allow the other party to act as though the promise does not exist.
What happened in Hughes v Metropolitan Railway Company (1877)
A landlord gave a tenant six months to repair a property. During this time, they entered into negotiations for selling the property, leading the tenant to delay repairs. When negotiations failed, the landlord tried to evict the tenant for not making repairs in time
What is the test for Equitable/Promissory Estoppel
- Legal relationship
- One of the parties promises to release the other from legal duties owed to the promisor
- The promise is intended to change the legal relationship/ terms of agreement
- The promisee, acting in reliance on the promise, acts in a way that alters their position
Can Promissory Estoppel be used to sue others
No - In Canada it can only be used as a defense
What is Intention and what is it not
intention to create a legal relationship
Not:
The intention to purchase a specific good or service.
The intention to pay at a certain date.
The intention to agree to a particular term
